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CIT Sends Back Use of 'Likely Selling Price' of Non-Prime Goods in Line With CAFC Precedent

The Commerce Department must provide further explanation for, and if needed, reconsider its finding as to whether the "likely selling price" of non-prime plate set in antidumping respondent AG der Dillinger Huttenwerke's books is the best available information for evaluating the cost of production, the Court of International Trade ruled in a Sept. 23 opinion. Given the U.S. Court of Appeals for the Federal Circuit's opinion in a "parallel matter" instructing Commerce to find the actual cost of production for prime and non-prime cut-to-length plate, Judge Leo Gordon sent back Commerce's reliance on Dillinger's "likely selling price" of non-prime plate.

If Commerce continues to use facts otherwise available, it must explain how its reliance on information showing the likely selling price ensures that the reported costs of production " reasonably reflect the cost of producing the merchandise under consideration," Gordon said.

The case concerns the antidumping duty investigation on carbon and alloy steel cut-to-length plate from Germany. Dillinger's case at CIT challenged Commerce's cost of production (COP) determination for Dillinger's prime and non-prime plates. The agency found that Dillinger uses internal "factory results reports" to value the non-prime products at their "likely selling prices," using this value as an offset to the production of prime goods. In the case's first opinion, CIT remanded Commerce's reliance on the price offset, finding that Commerce must use a respondent's actual cost data as opposed to its likely selling price in line with Federal Circuit precedent (see 2108180046).

In the Federal Circuit case, Dillinger France v. U.S., the appellate court sent back the agency's decision to adjust the reported costs of the respondent's non-prime plate based on the likely selling price for non-prime plate, requiring Commerce to find the actual cost of production for prime and non-prime plate. "Given the near identical nature of the challenge to Commerce's cost adjustment ... in this matter," Gordon said he previously remanded the case on the same grounds.

On remand, Commerce reopened the record and issued a supplemental questionnaire to get the physical characteristics of the non-prime goods and the actual cost of making the non-prime goods. Dillinger said in response that it could not give any actual cost information, arguing instead that Commerce should use the average cost of total cut-to-length plate production for calculating any COP adjustment since non-prime plate can only be set apart from prime plate at the end of the production process. Commerce rejected this proposal after finding that using this average would distort the disparity in costs across the products. The agency filled the record with facts available, relying on the cost assigned to the prime and non-prime goods as likely selling price set in Dillinger's normal books.

Gordon held that these same steps were taken by Commerce in the Federal Circuit case and were summarily rejected. "Since the issue, Commerce’s analysis, and the arguments of the parties are nearly identical to those presented in Dillinger France, the court concludes that a remand is equally appropriate here," the opinion said. "Because Dillinger has failed to place information on the record demonstrating the actual cost of production of its non-prime products, Commerce may reasonably rely on facts otherwise available pursuant to § 1677e(a)(1); however, in making its selection of facts otherwise available, Commerce must explain how its reliance on information indicating the 'likely selling price' of non-prime products accords with its obligation to ensure that the reported costs of production reasonably reflect the cost of producing the merchandise under consideration."

(AG der Dillinger Huttenwerke v. United States, Slip Op. 22-114, CIT Consol. #17-00158, dated 09/23/22, Judge Leo Gordon. Attorneys: Marc Montalbine of deKieffer & Horgan for plaintiff Dillinger; David Bond of White & Case for consolidated plaintiffs; Kelly Krystyniak for defendant U.S. government; Roger Schagrin of Schagrin Associates for defendant-intervenor SSAB Enterprises; Alan Price of Wiley Rein for defendant-intervenor Nucor Corporation)